Customs busts largest money laundering case on record, arresting seven

Hong Kong customs announced on Friday that they have arrested seven people in relation to a money laundering case involving around HK$14 billion.

Customs stated that a transnational crime syndicate established multinational shell companies and stooge accounts, claiming to be overseas diamond and electronic products trade, etc., and used falsified trade records to exaggerate trade amounts and traffic large amounts of funds into Hong Kong.

On January 30, customs mounted an enforcement operation codenamed "Daybreak" and raided seven apartments and four commercial units located in Hung Hom, Ho Man Tin and Kowloon City, arresting seven people and freezing HK$16.5 billion in assets.

The mastermind behind the system is revealed to be a 34-year-old non-Chinese local who opened eight shell companies and 11 stooge puppet accounts with his family members.

All companies used a commercial unit in Hung Hom as the site of registration, with the site also being related to the operating company.

And through a middleman, they "recruited three local men to open shell companies and bank accounts to serve as stooge accounts for the syndicate in 2021.

A customs spokeswoman pointed out that there were some accounts that had seen HK$100 million in a single day, and the highest single transaction reached HK$48 million. Money was transferred extremely frequently in and out of the accounts, exceeding 50 transactions – the highest recorded amount of transfers in a single day – which is different from the general import and export trade business model.

The investigation revealed that the total amount of funds invested in the crimes totaled up to around HK$290 billion and was related to a mobile application scam in India. It is also believed that the syndicate transferred a large amount of scammed money from India into Hong Kong accounts in the name of international trade.

An investigation is ongoing. The seven arrested persons have been released on bail pending further investigation, and the likelihood of further arrests has not been ruled out.